Opinion – Xbox One's Uphill Race To Catch PlayStation 4

If Microsoft wants the Xbox One to have a larger worldwide
install base than the PlayStation 4, it will face a harder road than it did in
the last generation.

Microsoft's Xbox 360 was the defining console of the last
generation in North America. A year head start, lower initial price point, and
games like Gears of War, Halo, and Call of Duty (which thrived on 360 and its
excellent Xbox Live online service) helped it gain a healthy lead in sales over
Sony in the U.S. - a lead it never relinquished. Lifetime sales* of the Xbox
360 in North America currently stand at 46.36 million to PlayStation 3's 28.38
million. That's an impressive gap, and it speaks to Microsoft's great
marketing, better third-party software sales, comprehensive online service, and
aggressive price-cutting throughout the generation. For this reason, I think
many U.S. gamers perceive that the generation was an overwhelming victory for
Microsoft.

However, the worldwide numbers tell a different tale, one in
which the consoles fought it out to a dead heat.

Xbox 360:

46.36 (NA)

25.23 (EU)

1.66 (JP)

7.87 (Other
Territories)

81.12 (Total)

PlayStation 3:

28.38 (NA)

32.98 (EU)

9.91 (JP)

11.36 (Other
Territories)

82.63 (Total)

When European, Japanese, and other worldwide territories'
sales are added in, the Xbox 360 and PlayStation 3 are essentially tied. These
particular projections show Sony with a slight lead, but given that sales
numbers are a moving target and both systems are still selling, I'm going to
call it a draw.

Sony makes up the ground it lost in North America to Microsoft
with strong leads in Europe and other worldwide territories, and a dominating
margin of victory in Japan.

These margins are inconvenient truths for Microsoft, and seem
unlikely to change in this generation. For one, Microsoft seems to have written
off Japan. In the early days of the Xbox 360, the company genuinely tried to
win over Japanese gamers with exclusive partnerships with Mistwalker (which
brought the 360 the excellent JPRGs Lost Odyssey and Blue Dragon) and Capcom
(Dead Rising and the Lost Planet: Extreme Condition). Despite these efforts,
the console never made a dent in Japan, and in this generation Microsoft seems
be far less committed to Japanese market. It's important to note that Japan has
been shrinking as a console market, and PlayStation 4 has experienced sluggish
sales in the country following a successful launch in February. So, it's likely
that Japan might not contribute as many sales to Sony's tally as it did in the
last generation - but it's also likely that Microsoft's already small
market share will shrink further. Either way, Sony will eventually sell
millions of PlayStation 4s in Japan, and Microsoft will be lucky to break
seven-digit sales with Xbox One.

Europe and the U.K., which have also been traditional Sony
strongholds, are areas in which Microsoft could conceivably do better in this
generation. So far that has not been the case, with PS4 dramatically outselling
Xbox One in Europe.

However, right now Sony's more advanced worldwide organization
and distribution system is giving the company a huge advantage over Microsoft.
PlayStation 4 is on sale in 57 countries. Microsoft only sells Xbox One in 13
countries. It intends to add 26 new territories (including Japan), but that
won't happen until September of this year. That's a long time for Sony to
increase its already commanding worldwide lead.

Here's a snapshot of where worldwide sales for Xbox One and
PlayStation 4 stand now:

Xbox One:

2.79 (NA)

0.98 (EU)

0.00 (JP)

0.26 (Other Territories)

4.03 (Total)

PS4:

3.06 (NA)

2.36 (EU)

.47 (JP)

0.67 (Other
Territories)

6.56 (Total)

Obviously, with Titanfall now out, I'd expect to see a big
bump for Xbox One when the next U.S. NPD data is announced, and Sony's
Infamous: Second Son will likely help propel PlayStation 4 past the 7 million
mark. But, for right now, this is where we're at: with Sony enjoying a lead in
consoles sold of between 2 and 3 million units on a worldwide basis.

Looking at the numbers, I don't expect Microsoft to gain much
momentum from its September Japanese launch, but the other 26 territories it's
adding at the same time will definitely help its worldwide reach. European
sales are already improving due to Titanfall, including a 96 percent bump in
the U.K. the week Titanfall launched. I expect it will continue to improve in
countries like the U.K., where gaming tastes are fairly similar to those in the
U.S. However, if Microsoft is to "win" this console battle, the most likely route
to victory is to once again dominate in its traditional stronghold of the U.S.
and Canada.

I expect Microsoft to begin to close the gap with Sony in the
U.S. Titanfall was the subject of a lot of hype, and (for the most part) lived
up to it. It's a fast, excellently built shooter - exactly the type of
gaming fare that was the Xbox 360 audience's bread-and-butter in the last
generation. Microsoft also has another Halo game in development, which we'll
likely see at E3, and has recently secured the Gears of War franchise and
reunited it with Rod Fergusson, who was one of the leads on the project at
Epic. As before, Microsoft has broad third-party software support, and seems to
be intent on paying for some high-profile exclusives like Dead Rising 3 and first
dibs on Call of Duty: Ghosts DLC.

One thing Microsoft won't have is a head start. Releasing in
November of 2005, the Xbox 360 enjoyed a full year on store shelves before the
PlayStation 3 launched in 2006. Additionally, let's not forget that PS3's most
attractive model - the version with the 60 GB hard drive, internal Wi-Fi, and
HDMI port - was saddled with an exorbitant $599.99 price point. That system
didn't truly hit its stride until years three and four, thanks in large part to
the more affordable PS3 Slim model.

Sony went to great lengths to make sure PlayStation 4 didn't
repeat these mistakes. The system launched a week before Xbox One - and at a
lower price point. So far, this strategy has been successful. By the looks of
it, Microsoft is already flirting with a price drop, as it has already done a
"temporary" discount and bundling of Xbox One with Titanfall at retail.

A price drop - perhaps accomplished by ditching the
packed-in Kinect sensor bar to save costs - would definitely help. Better software
and marketing will help as well. However, Xbox One is already behind and it
won't be enough to just catch up to Sony's month-to-month sales; Xbox One will
have to outsell PlayStation 4 at retail for an extended length of time in
America to have any hope of overtaking the lead - and that's not factoring
in the disadvantages it has in the global market. Microsoft's game plan moving
forward should be simple: drop price, fight Sony to a draw in the big European
territories, and hope that you can gain some serious momentum in North America.
It's not impossible, but it won't be easy.

Thankfully, it's not an all-or-nothing proposition. This last
generation disproved the notion that there is only room for one dominant game
console. When you add Nintendo's best-selling Wii to the mix, there were three
consoles that were solidly successful for their manufacturers. That's a good
thing for both gamers and the game industry.

*Note on sales numbers: I
want to talk about numbers. I'm going to be referencing numbers from the last
generation (Xbox 360, PS3) and the current generation (Xbox One, PS4)
frequently in this article. There's no industry-sanctioned site that gives out
numbers (this is why companies pay thousands of dollars to companies like NPD
for analytics). However, the site VGChartz.com does publish numbers, based on
projections and information gleaned from investor calls, press releases, and
financial statements. Many people question the validity of VGChartz, so I
double-checked the numbers with Michael Pachter, the high-profile analyst from
Wedbush Securities. As someone who has access to all the numbers and makes his
living analyzing them, Pachter looked at the VGChartz overall console sales
data and told me that it was accurate for the last generation.

I'm really glad that the competition is so fierce in the realm of video game consoles. This race is going to put pressure on everyone to have the best console with the most features. Can't wait to see what the next few years hold!

This is a great article for both PS and MS fans. And while reading most of the comments, I see almost everyone getting along and not hating on the Xbone or the PS4. It truly shows that we have come along way from last years E3

First off, Xbox didn't have to play catch up last Generation, it lead all the way through the cycle and is currently tied or slightly ahead of PS3. It looks like the roles will be changed this time around, but i expect the end results to be pretty much the same thing. Go Gaming!

If you prefer either console good for you, if you own both consoles with no prejudice even better. Speaking solely from my experience I have run into some nasty childish Xbox fan boys in my time and I hope they are all eating the sh*t out of some crow right now. That's, my, word!

Thank you Matt Helgeson for doing research that I'm interested in but would have taken me a long time to do. I was happy to see the overall console race last generation was closer between Sony and Microsoft than people in the US think. Oh, and of course, I'm glad Sony is currently ahead because I chose PS4.

Well you know. I can't think of anything where the best example is the biggest seller.
Is Titanic the best film of 1997? Is the best selling car of all time, the Chevy Impala; the best car in the world? Surely it must be, it sold the most copies. McDonald's is clearly the World's finest restuarant, right? And every politician that ever won an election was definitely the best possible choice too...
If X-bone fails we are all going to be telling you people how much better it was for years, just like all those dreamcast fanboys.

Microsoft needs to invest in India more. India is a big market for Microsoft, and according to my friend Sujayendra, the Indians love the Xbox because Microsoft gave them a chance, when Sony didn't. The Xbox was over in India, and sold a lot. It was a year or two later Sony saw that it was a good investment, and decided to invest there, but it was late. Speaking of which, the PS4 is going almost $700 over there.

Okay first of all Xbox one is less powerful than PlayStation 4. Dropping the price would make absolutely no sense, if both consoles are equal in price, then people will just buy the best console out of the two and that is PlayStation 4.
PS4 runs better all the games, they also look better on PS4.
Why would you waste the same amount of money on a console that is clearly inferior???

This is a silly opinion piece imho. As of now Microsoft has sold 4.1 million XBOX 1 despite being in less than half the market Sony has reached and not even counting Titanfall bundles and the 50 price drop. They have said it before ," this is a marathon not a sprint" and they are in a good position. The made it very clear despite consumers taking to it or not that they want the Xbox to be the center of tour living room. And despite claims from Sony as being "for gamers" , Xbox has been aggressively gaining exclusives and have a better AAA library. With more exclusives , working on 360 emulation and releasing in later markets by the end of the year , it will be a good race.

Also aren't all Xbox one games in 720p instead of 1080p like the PS4? It would help if it weren't over a hundred more dollars expensive than the ps4, which for the most part is a better system all around. I'm really disappoint that there are not that many games out for the Xbox one as well.

I don't think Microsoft really views it a the battle to the death Sony does. I mean, I'm pretty sure they've both already made a profit. That's really all that needs to be said. There'll be another Xbox system down the road. And there'll be another Playstation. Frankly, I think Microsoft is at least trying to do new things. Anyone familiar with the concept of technological convergence? Doing more is better in the long run. Incorporation eventually becomes integration, improving all functions. That's why your smartphone not only does tons of stuff, but does it all really well.

I could care less about the console war myself. Up until a few years ago, I enjoyed having both systems in my home through the various gens. Then, Microsoft started dropping the exclusives I like after deciding to focus on the bro fist mentality..like they couldn't even bother to try, while Sony had the inherent benefit of close ties in these genres. After my last 360 burned out, I didn't bother with them again.

That's why I haven't bothered with Xbox One thus far, and unless they crack back into those genres they currently have a massive lack of...I won't, as multi-platform games aren't going to swerve me when I can get them on PS4.